Ministry of Finance
Important changes w.r.t Liberalised Remittance Scheme  and Tax Collected at Source 
No change in rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of mode of payment, for amounts up to Rs. 7 lakh per individual per annum
Government gives more time for implementation of revised TCS rates and for inclusion of credit card payments in LRS
Increased TCS rates to apply from 1st October, 2023
In the Budget this year, certain changes were announced to the system of Tax Collection at Source  on payments under the Liberalised Remittance Scheme  and on overseas tour program packages. These were to take effect from 1st July 2023. It was also announced in March that credit card payments would be brought under the LRS. Numerous comments and suggestions were received which have been carefully considered.
In response to the comments and suggestions it has been decided to make suitable changes. Firstly, it has been decided that there will be no change in the rate of TCS for all purposes under LRS and for overseas travel tour packages, regardless of mode of payment, for amounts up to Rs. 7 lakh per individual per annum. It has also been decided to give more time for the implementation of the revised TCS rates and for inclusion of credit card payments in LRS. The changes are detailed below.
Sub-section  of section 206C of the Income-tax Act, 1961  provides for Tax Collection at Source  on  foreign remittance through the Liberalised Remittance Scheme  and  sale of overseas tour program package.
Through the Finance Act 2023, amendments were carried out in sub-section  of section 206C of the Act. These amendments, inter alia, increased the rate of TCS from 5% to 20% for remittance under LRS as well as for purchase of overseas tour program package and removed the threshold of Rs 7 lakh for triggering TCS on LRS. These two changes were not applicable when the remittance is for education or medical purpose. These amendments were to take effect from 1st July 2023.
The Government had notified Foreign Exchange Management   Rules, 2023 vide an e-gazette notification dated 16th May 2023 to remove the differential treatment for credit cards vis à vis other modes of drawal of foreign exchange under LRS.
After discussions with various stakeholders, and taking into account comments and suggestions received, the following decisions have been taken:
i) To give adequate time to Banks and Card networks to put in place requisite IT based solutions, the Government has decided to postpone the implementation of its 16th May 2023 e-gazette notification. This would mean that transactions through International Credit Cards while being overseas would not be counted as LRS and hence would not be subject to TCS. The Press Release dated 19th May 2023 stands superseded.
ii) Threshold of Rs. 7 Lakh per financial year per individual in clause  of sub-section  of section 206C shall be restored for TCS on all categories of LRS payments, through all modes of payment, regardless of the purpose: Thus, for first Rs 7 Lakh remittance under LRS there shall be no TCS. Beyond this Rs 7 Lakh threshold, TCS shall be
a) 0.5% ;
b) 5% ;
c) 20% for others.
For purchase of overseas tour program package under Clause  of Sub-section , the TCS shall continue to apply at the rate of 5% for the first Rs 7 lakhs per individual per annum; the 20% rate will only apply for expenditure above this limit.
iii) Increased TCS rates to apply from 1st October, 2023: The increase in TCS rates; which were to come into effect from 1st July, 2023 shall now come into effect from 1st October, 2023 with the modification as in  above. Till 30th September, 2023, earlier rates  shall continue to apply.
Earlier and new TCS rates are summarised as under:
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Nature of payment

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Earlier rate before Finance Act, 2023

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New rate wef 1st October 2023

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LRS for education financed by loan
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Nil upto Rs 7 lakh
0.5% above Rs 7 Lakh
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Nil upto Rs 7 lakh
0.5% above Rs 7 Lakh
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LRS for Medical treatment/ education 
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Nil upto Rs 7 lakh
5% above Rs 7 Lakh
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Nil upto Rs 7 lakh
5% above Rs 7 Lakh
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LRS for other purposes
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Nil upto Rs 7 lakh
5% above Rs 7 Lakh
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Nil upto Rs 7 lakh
20% above Rs 7 Lakh
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Purchase of Overseas tour program package
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5% 
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5% till Rs 7 Lakh, 20% thereafter
Note:  TCS rate in column two shall continue to apply till 30th September, 2023.
 There shall be no TCS on expenditures under LRS under clause  of Sub-section  for the first Rs. 7 lakh, irrespective of purpose.
The necessary changes to the Rules , 2000) are being issued separately.
Legislative amendment in this regard shall be proposed in due course. Circular and Frequently Asked Questions  shall be issued to clarify various practical issues in implementing this provision.